I recently received a common mail circulated within HCL - a mass forward that talked about the too-hot-to-handle real estate prices in Chennai. Like any good mass forward mail, it had a ton of spelling mistakes and in a couple of places - was factually incorrect.
However, the mail made me think; Where does this madness end? Today, a 1000 sq. ft flat in my locality would set you back by a whopping 4 million rupees (approx. $85,000) and apartments in the range of 15 million to 25 million ($325K to $550K) are pretty commonly heard in Chennai. Hey, at that rates, you can as well choose between nungambakkam (Chennai) or newton (boston suburb)!I made some calculation - if you take up a loan of 2 million, you would end up paying 20K per month for the next 20 years to just get an medium-small apartment tucked in some corner of the city! While a lot is associated with NRI investment as well as expat returns, there is also a factor of the real estate agents taking advantage of the situation.
I recently read this report on BBC and the future looks bleak for anyone saving to buy a place in India. Reminds me of a dialogue from the movie - Mudalvan "Save throughout your career, after retirement, buy a 1200 sqft land, build a small house with a lawn and sit there and read paper".
Looks to me, like that is a highly unlikely scenario. And while i wrote this blog, i am sure that some realestate agent just hiked the price of the apartments in chennai a notch again.